MY HUSBAND AND I purchased a home near Phoenix, Arizona, in 2019. It was the second house we’d bought in less than a year, so we were only able to come up with a 10% down payment. That’s meant paying $70 a month for the past 30 months to cover the cost of private mortgage insurance (PMI).
With property values in the Phoenix area up 30% since 2020, I knew I should contact our mortgage company to see if we could get the PMI payment removed. I assumed an appraisal would show our home equity had increased to the point where we no longer needed to carry the coverage.
Still, I hesitated to make the phone call because I feared the entire process would be both time-consuming and costly. I expected a full appraisal to run at least $500. I also assumed that finding an appraiser and then having him or her evaluate our home, process the paperwork and report back to our mortgage lender would take months.
In December 2021, I finally contacted our mortgage company. I was directed to the PMI department and was immediately able to speak to a customer service representative. The rep told me I had two options. I could pay for a full appraisal, estimated to cost between $500 and $600. Or, for $150, I could opt to have a broker price opinion report created. This second option involved having a real estate agent evaluate photos of our home. After comparing the features of our home to those of houses in our neighborhood that had recently sold, the agent would compute our home’s estimated market value.
Within three days of my initial phone call, a mortgage company representative arrived at our doorstep. She spent no more than five minutes walking through our home snapping a few photos. Within a week, we had a full market comparison report from a real estate agent. The estimated market price for our home came in at nearly $120,000 more than what we’d paid. The mortgage company informed me two days later that our PMI payment would be removed starting February 2022.